Starting Paper Bag Making – High Profit Margin Business Plan With Investment

paper bags business plan

Organic farming has reached heights in its importance and this idea has paved way for paper bags too. In both the businesses one common factor is noticed, and it is none other than the presence of eco-friendliness. Paper bags are now being wanted by all the companies to pack their products. This is mainly due to the fact that all of them have realised the harmful effects that arise out of plastic bags usage. Apart from these reasons, the government’s intention to provide products which are eco-friendly has also contributed to the evolution of paper bags.

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Paper Bag making business can definitely survive for a very long time as you know that its emergence was only before a few years. So, it’s the right time for you to enter into the market and develop your company. Keeping all the business plans aside, focus on quality of the produced bags. This is the key to bring your company to the center stage of the market. If you compromise on the quality, then the whole process and plan becomes useless. In this article you will learn about how to start paper bags making business, what are the machines required and most important, investment required to start this business.

Paper Bags – Business Opportunity

Almost all the sectors of the society use paper bags and the actual usage or purpose is different for each. Paper bags are used to pack even medical items. Here, you will have to check for the quality standards and hygiene while manufacturing. The same rule goes for paper bags for packing food items.

High levels of risk are involved while manufacturing paper bags for food items. Toxic substances used may end up in undesirable incidents. Thus, choose the right methods of manufacturing and have regular inspection in the quality of the bags. Taking about specialisation, you can either have a mix of all the paper bags or specialise in producing paper bags for specific industries. Below listed are some of the areas where paper bags are used

  • Party bags
  • Shopping bags
  • Paper bags for food items
  • Paper bags for medical use
  • Paper bags for jewellery packaging
  • Paper bags for industries to pack their semi-finished goods
  • General purpose

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Investment Required To Start Paper Bags Making

The primary factor to be looked after in any business is that how much money is required to start it. As paper bag making is purely a small-scale business and will require minimal investment. Depending on your capacity you can plan and invest in the land, machinery and labor. Making it clear, finance is the only factor which decides the size of the business. So, make sure you don’t go wrong there by planning big with less investment.

The price of one fully automatic paper bag making machine is around 5 – 8 Lakhs INR. The price is dependent on the production capacity of the machine. One fully automatic machine can produce 15000 pieces/hour.

You can also start this business with the help of a semi-automatic machine. The price of such machines is under 3 Lakhs INR. Production capacity will be low and it will depend on your labor/staff manual work. You can also start fully manual manufacturing unit with the investment of INR 50,000 only.

Be sure about the resources you already have and the ones you will have to procure. All these research and study will help you reduce your costs to some extent. Have proper planning as to where to spend and from whom to procure. Your suppliers are also a factor to be considered when it comes to investment. If you choose a wrong supplier, then the cost of making or production will go high thereby altering your plan for investment and working capital.

Selection of Location for Your Manufacturing Unit

Choose the most appropriate location where you can reduce your manufacturing costs. This simply insists on finding a place where you will have less charges for electricity, labours for less wages, land for minimal rent and other such facilities at a lower cost.

The land your rent for the business should not outweigh your profits. A semi-urban area will be the right choice for this business. This is because you can enjoy the benefits of urban area as well as rural area. Taxes and other obligations can be reduced to some extent. If you are delivering your manufactured bags to your clients, then the transportation cost should be planned. To make it minimum, fix the location near to the market. Also, try to reduce the distribution channel since they may increase the price and lessen your margin.

Raw Materials for Paper Bags Making

This forms the major part in the total requirements of the manufacturing process. The raw materials needed for this business should be present in right quantity to ensure smooth flow of production. It should not be below the minimum level, as they may lead to work stoppage and other issues pushing the company to loss. Vendors should be selected based on the quality of material, delivery function and the cost of the materials.

  • Paper sheets
  • Paper roll colors and white
  • Printing chemicals, ink etc
  • Eyelets
  • Laces and tags
  • Polyester stereo

These are some of the items which make up to the term raw materials. Procuring them at the right time is also important since overstocking might increase the operating costs by involving storage costs, inventory costs, holding costs and so on.

Required Machines For Paper Bags Manufacturing

The machinery you procure should be reliable and worthy. The durability of the machines purchased should be checked before you purchase them since the quality of the machine used decides the quality of the product produced. Keeping all this in mind, choose the best machines with greater productivity.

I would recommend you to visit a paper bag manufacturing firm and know more about the working of machines. More than the knowledge you acquire through reading, a direct visit will give you a better idea to decide on the type of machinery to be purchased. Machines cost from 5 lakhs to 10 lakhs depending on their capacity and the size of bag manufactured. Some of the very important machines to be purchased are,

  • Testing scale machine
  • Creezing machine
  • Bag cutting machine
  • Stereo press and stereo grinder
  • Lace fitting machines
  • Eyelet fitting machines
  • Punching machines
  • Roll slitter motorized machines
  • Printing machines

Machines used vary on the level of performance too. They can be fully automated or even semi-automated.  Depending on this factor the cost of the machines varies greatly and it’s your choice to make the right decision taking into consideration your actual need.

For printing, you can either buy machines has a printing function associated with it or have a separate printing machine. Maintenance of the machine is mandatory and, in this concept, I would suggest you to adopt preventive maintenance. Preventive maintenance is simply taking care of the machine before it shuts down or goes in non-working condition.

Spending for preventive maintenance is better than the repair costs. If you do not take care of your machines at regular intervals, then there will be a decline in the quality of the produced bags. Also, the replacement cost of the machines after breakdown will be high.


This business does not require much labour since it is a small-scale business. It is just a maximum of 10 people working in the production unit. Again, if your business size is big you will need more labour. The labours need not be professional, but they should be skilled enough for manufacturing paper bags.

An orientation or training program for them to learn the manufacturing process will help in producing the bags with common standards. There can be one graphic designer in the unit to look after the designing work and other specifications. You can print your company’s logo if you wish to popularise your brand. There are few companies who order for paper bags with their desired logo and colour. In such cases you cannot make your brand more attractive or catchy in the bag. Thus, the printing decisions depend purely on the customers.

Steps Involved in Making of Paper Bags

  • The very first step is to decide on the size to be produced. The desired size accurately measured and cut using the cutting machine.
  • Next step is to print the specified information or logo. The print quality should not be kept low.
  • Then, the paper should be left for folding, pasting and shearing. This is an automated process and you can do it with the help of machines.
  • The last two steps are eyelet fitting and lace fitting.

These steps are not the only way to produce paper bags. The operations may differ with the use of different machines.

License Required to Start this Business

As you know any business operating now in the society will require a trade license. This license can be obtained from the nearest municipal authority. Then you will have to get your UDYOG AADHAR registration completed. It is for businesses running under the name of small-scale industries. There is a website for this registration which will enable you to obtain this online (

After registering Udyog Aadhar, register for GST number. BIS stands for Bureau of Indian Standards, and this is a mandatory certification needed for operating this paper bag manufacturing business. Information relating to this can be found in  With all these registrations, you can proceed with the start of the business without any legal issues.

Adopt viable promotional strategies and make it possible for yourself to improvise your business. It is completely in your efforts how your company survives in the market. In the end, paper bags manufacturing can be trusted entirely since it has another dimension of style statement. Living standards have changed and because of this, you will witness a continuous growing demand for paper bags.


1. What are the key considerations when starting a paper bag making business?

Starting a paper bag making business requires a few key considerations, such as the type of paper bag you want to make, the equipment you need, the market for your paper bags, and your business model.

2. What are the most important factors to consider when creating a paper bag making business plan?

There are a few key things to consider when creating a paper bag making business plan: 1. The size of your market – How many people will need or want paper bags? This will help determine the size of your business and how much demand there is for your product.
2. The cost of production – How much will it cost to make each paper bag? This will have a big impact on your overall profitability and will need to be considered carefully.
3. The competition – Who else is making paper bags? How will you differentiate your products and service from theirs?
4. Your team – Do you have the right people in place to make your paper bag making business a success? This includes everything from designers and manufacturers to sales and marketing staff.
5. Your finances – How will you fund your paper bag making business? Do you have enough capital to get started and to sustain yourself during the early days?

3. How much money will be needed to start a paper bag making business?

You will need to purchase a paper bag making machine and raw materials. The cost of a paper bag making machine can range from $1,000 to $10,000. The cost of raw materials will vary depending on the type of paper used.

4. What are the start-up costs associated with a paper bag making business?

There are a few key start-up costs associated with a paper bag making business. These include the costs of raw materials, equipment, and space. Additionally, other start-up costs may include marketing and advertising expenses.

5. How much revenue can a paper bag making business generate?

The amount of revenue a paper bag making business can generate depends on a number of factors, including the size and location of the business, the type of paper bags the business produces, and the demand for paper bags. Generally, a paper bag making business can generate between $30,000 and $50,000 in revenue per year.

6. What are the profit margins for a paper bag making business?

Profit margins can vary greatly for a paper bag making business. It depends on the size and scope of the business, the type of paper bags being made, the manufacturing process, the cost of raw materials, and other factors.

7. What are the key marketing strategies for a paper bag making business?

There are several key marketing strategies for a paper bag making business:
1. Know your target audience: It is important to know who your target audience is and what needs they have. This will help you determine what type of paper bags to make and how to market them.
2. Create a unique selling proposition: What makes your paper bags different from others on the market? This can be anything from the materials used to the design and printing. Make sure you highlight this in your marketing.
3. Use attractive visuals: People are more likely to remember your paper bags if they are visually appealing. Use images and colors that will catch people’s attention.
4. Use social media: Social media is a great way to reach out to potential customers and create awareness for your paper bag making business. Use platforms like Facebook, Twitter, and Instagram to connect with people.
5. Participate in trade shows and events: Attending trade shows and events related to paper bag making is a great way to network and generate interest in your business. This can help you get new customers and grow your business.

8. How can a paper bag making business stand out from the competition?

There are a few ways a paper bag making business can stand out from the competition. One way is to offer a unique product, such as bags made from recycled paper or paper bags that are environmentally friendly. Another way is to offer a competitive price. Finally, a paper bag making business can provide excellent customer service and a high level of quality control.

9. What are the most common mistakes made when starting a paper bag making business?

Some of the most common mistakes made when starting a paper bag making business include:
1. Not investigating the market thoroughly before starting the business. It is important to know who your potential customers are and what their needs are before starting a paper bag making business.
2. Not having a clear business plan. A business plan will help you to map out the steps you need to take to succeed.
3. Not investing in good quality equipment. If you are going to be making paper bags, you will need good quality machines and materials.
4. Not hiring experienced staff. If you are not experienced in paper bag making yourself, it is important to hire staff who are.
5. Not promoting your business effectively. You need to make sure that potential customers are aware of your paper bag making business.

10. What are the biggest challenges faced by a paper bag making business?

The biggest challenges faced by a paper bag making business are finding the right suppliers for paper and other materials, and keeping up with customer demand. Other challenges include designing and advertising the bags, and managing inventory and production.

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